First, a little background. Here’s how OWED works: Just like the State’s already failing solar energy program, producers of the electricity generated from wind would receive a credit for every megawatt of power produced. The solar program calls these SRECs; in the case of wind they are called ORECs. The State’s Energy Master Plan currently mandates that 22.5% NJ’s electricity mix must come from renewables by 2020 (as of 2011 renewables accounted for just 1.18% of electricity generation in the state).

NJ utilities like PSE&G would be forced to buy the electricity from the producer in accordance with the renewable energy mandates. The ORECs, according to NJ Spotlight, can “fetch up to $670″ from utilities and the additional costs would then be passed directly on to ratepayers.

But there’s a catch with OWED. Before any proposal is approved to implement the project, a “net” economic benefit to the state has to be shown. Of course, this is impossible since offshore wind is one of the most uneconomical ways to produce electricity on the planet. The federal government’s own Energy Information Administration (EIA) pegs the levelized cost of offshore wind for plants coming online in 2018 to be $221.5/megawatthour (MWh). That’s nearly 4 times higher than natural gas which is $67.1/MWh!

“The most expensive offshore wind power in the world”

In February of 2012 the State hired an independent consultant to review a proposal by Fishermen’s Energy to implement the OWED project. Their conclusion was damning: Fishermen’s Energy’s plan, they said, would wallop ratepayers with “the most expensive offshore wind power in the world” while costing the state some 30,000 jobs and nearly $1 billion in “economic activity over the 20-year contract”!

And herein lies the good news for ratepayers: time is running out. The state agency responsible for pursuing the tax breaks — the Board of Public Utilities — hasn’t done so and has given no indication they will. Per NJ Spotlight:

The developer needs the BPU to act on the project sooner rather than later if it is to obtain lucrative federal investment tax credits crucial to drive down the cost of the pilot and retain the Division of Rate Counsel’s support.

Adding:

If the decision is put off until after the November election, it may be too late for the project to qualify for the crucial tax credits, according to others in the offshore wind sector

For New Jersey ratepayers who already are saddled with some of the highest electricity rates in the country, too late cannot come too soon!